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American Odds and Implied Probability Guide

Sports betting odds can be expressed in different formats including fractional, decimal, and American odds. American odds, which are most commonly used in the US, represent the profit a bettor would receive on a $100 wager. Positive American odds show the potential profit, while negative odds are used for the favorite team. Implied probability can be calculated from the odds to determine the probability of an event occurring according to the oddsmaker. The implied probability is found by taking 100 divided by the positive odds plus 100, or the negative odds divided by the negative odds minus 100.

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750 views2 pages

American Odds and Implied Probability Guide

Sports betting odds can be expressed in different formats including fractional, decimal, and American odds. American odds, which are most commonly used in the US, represent the profit a bettor would receive on a $100 wager. Positive American odds show the potential profit, while negative odds are used for the favorite team. Implied probability can be calculated from the odds to determine the probability of an event occurring according to the oddsmaker. The implied probability is found by taking 100 divided by the positive odds plus 100, or the negative odds divided by the negative odds minus 100.

Uploaded by

Angela Brown
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Sports Bet Odds & Implied Probability

All gambling is mathematics, even games of chance. If you understand the math behind the
game, you understand the game and can give yourself an advantage. For many games, like penny
slots or poorly placed roulette bets, are so bad that smart bettors earn their advantage by avoiding
them altogether. In sports betting, the math is more complicated. Depending on your favorite
sport, you may need to think about things like bye weeks, underdogs, quarterback ratings, and
injuries. The three most common sport bet odds are: Fractional odds, Decimal odds, and
American odds.
FRACTIONAL ODDS
You will find fractional odds in Europe, not the U.S. Fractional odds are most common in the
UK in connection with betting on horse races. These odds are used to demonstrate that a bettor
will get their winnings proportional to their wager/stake.
DECIMAL ODDS
A widely used type of odds worldwide is decimal odds. If you are familiar with a variety of
sportsbooks, you will have encountered decimal odds. So, here is an in-depth explanation of
what decimal odds mean.
Decimal odds are not complicated when it comes down to it. The formula is the easiest to do on
your own. Hopefully, you will be an expert at understanding decimal odds from now on!
AMERICAN ODDS
American odds will also sometimes be referred to as Money Line. In the US, naturally, American
odds are the most widely used types of odds for sportsbooks. You will see them as either positive
or negative odds.
Positive odds represent the profit a bettor will potentially receive if they bet $100. That means if
they placed a wager of $50 on the Red Sox to be the winners, the profit the bettor would get if
the Sox win were $75.
American odds are quite easy to understand when broken down like that. Plus, you will find
these odds in most US sportsbooks. So, you should now be able to read most sportsbooks and
understand their odds.
IMPLIED PROBABILITY
Simply put, converting betting odds into probability is the implied probability. When
sportsbooks set the odds on a bet, they first determine the chance of winning that bet. This way, a
bookmaker hopes to avoid paying out too much to still make a profit.
HOW TO FIGURE OUT IMPLIED PROBABILITY
Now, you have learned how to understand the most popular kinds of odds. But that is not all you
need to know to place the best bets possible. If you figure out the implied probability of an event,
you can place your best bets.
Figuring out the implied probability using positive American odds is simple. You determine
probability by calculating the positive or negative odds of implied probability.
IMPLIED PROBABILITY FOR POSITIVE ODDS
Implied Probability = 100/ (Positive Odds + 100)
IP = 100/ (150 +100)
IP = 100/250
Implied Probability = .4
So, the implied probability that the Boston Red Sox will win is .4 or 40%. Thus, the bookmakers
for the sportsbooks will think the Red Sox have a 40% chance of beating the Yankees. You can
use these odds to figure out what you want to bet on and how much.
IMPLIED PROBABILITY FOR NEGATIVE ODDS
Now, you need to learn how to calculate implied probability when it comes to negative American
odds. Luckily, it is as easy as it is for positive odds. We will use the same numbers from the
money line example. So, the Yankees have -120 odds in this example.
Implied Probability = Negative Odds/ (Negative Odds – 100)
IP = -120/ (-120 – 100)
IP = -120/-220
Implied Probability = .5454
That gives us an implied probability of .5454 or 54.54%. So, the New York Yankees will have a
54.54% chance of being the winners of the game against the Red Sox.

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